All passengers are being offered a refund or a chance to rebook later in the year.
It launched commercially in October, but the 'on-demand' service drew complaints from Blue Islands and it had to withdraw individual seat sales until eventually being licensed by the Transport Licensing Authority.
Founder Nick Magliocchetti said: 'The application process was lengthy and the delays damaged momentum at a time when Waves was gaining significant ground, which ultimately had a detrimental effect on the business, our staff and our customers.
'Waves has chosen to commit to providing the Channel Islands with an alternative air service so, without us, the real loser would be the travelling public and businesses who have supported us and are stuck with no real competition, inflexible timetables and poor customer service.'
Mr Magliocchetti said Waves management was taking the next two months to restructure looking at expansion in both its fleet and its routes.
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